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Chapter Three

Analyzing the Marketing


Environment

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Chapter 3- slide 1
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Analyzing the Marketing
Environment
Topic Outline

• The Company’s Microenvironment


• The Company’s Macroenvironemnt
• Responding to the Marketing
Environment

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Chapter 3- slide 2
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The Marketing Environment

The marketing environment includes


the actors and forces outside marketing
that affect marketing management’s
ability to build and maintain successful
relationships with target customers

Copyright © 2010 Pearson Education, Inc.


Chapter 3- slide 3
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The Marketing Environment

Microenvironment consists of the actors


close to the company that affect its
ability to serve its customers -- the
company, suppliers, marketing
intermediaries, customer markets,
competitors, and publics

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Chapter 3- slide 4
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The Company’s
Microenvironment
The Company

• Top management
• Finance
• R&D
• Purchasing
• Operations
• Accounting

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Chapter 3- slide 5
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The Company’s
Microenvironment
Suppliers

• Provide the resources to produce goods


and services
• Treated as partners to provide customer
value

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Chapter 3- slide 6
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The Company’s
Microenvironment
Marketing Intermediaries

• Help the company to promote, sell


and distribute its products to final
buyers

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Chapter 3- slide 7
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The Company’s
Microenvironment
Types of Marketing Intermediaries

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Chapter 3- slide 8
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The Company’s
Microenvironment
Competitors

• Firms must gain strategic advantage by


positioning their offerings against
competitors’ offerings

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Chapter 3- slide 9
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The Company’s
Microenvironment
Publics

• Any group that has an actual or potential


interest in or impact on an organization’s
ability to achieve its objectives
– Financial publics(Banks, Investment houses etc)
– Media publics (News channels, editorial boards)
– Government publics
– Citizen-action publics (Consumer organizations)
– Local publics ( Neighborhood residents)
– General public
– Internal publics (workers, managers, volunteers)

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Chapter 3- slide 10
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The Company’s
Microenvironment
Customers

• Most important factor in micro environment


• The aim of entire value system is to satisfy
customer
• Types of customers markets are
– Consumer Markets
– Business markets
– Government markets
– International markets

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Chapter 3- slide 11
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The Company’s
Macroenvironment
Demographic Environment

Demography is the study of human populations


in terms of size, density, location, age, gender,
race, occupation, and other statistics
• Demographic environment is important
because it involves people, and people make
up markets
• Demographic trends include age, family
structure, geographic population shifts,
educational characteristics, and population
diversity
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Chapter 3- slide 12
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The Company’s
Macroenvironment
Demographic Environment

• Changing age structure of the


population
– In Pakistan 40% of the population is
younger among 14% is in 0-4 years bracket
– 173 million young people present a
lucrative business opportunity to marketers
– P&G responded to this by launching
Pampers in 2000

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Chapter 3- slide 13
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The Company’s Macroenvironment
Demographic Environment

• Increasing Population
– Rapid growth in urban population in Asia
– By 2030, half of the population will live in cities
– Growing middle class
• Indian population is called The Bird of Gold
• Population division on basis of income
– Deprived households (Disposable income<Rs. 7500/M, unskilled
workers)
– Aspirers(Disposable income Rs.7500 to Rs.17000, low skilled
industrial workers )
– Seekers (Disposable income Rs.17000 to Rs. 42000, white collar
workers)
– Strivers (Disposable income Rs.42000 to Rs.80000, Professionals)
– Global Indians (Disposable income> Rs.80000, Business Owners,
Film Actors, Politicians)
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Chapter 3- slide 14
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The Company’s
Macroenvironment
Demographic Environment

• High figure of rural population


• A Changing family system
– Traditionally combined family with some bread
earners
– Now both husband & wife work, rise in nuclear
families
• The Changing role of women
• A better educated, more white collared,
more professional population
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Chapter 3- slide 15
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The Company’s
Macroenvironment
Economic Environment

Economic environment consists of factors


that affect consumer purchasing power
and spending patterns
• Industrial economies are richer markets
• Developing Economies provide highest
opportunities for business
• Subsistence economies consume most of
their own agriculture and industrial output
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Chapter 3- slide 16
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The Company’s
Macroenvironment
Economic Environment

• Changes in income- rising middle class


– Asian automakers are producing cheap
cars for Asian markets
• The Global Financial Crisis
– “When America sneezes, the rest of the
world catches a cold
– Drop in GDP of Asian countries disturbed
the spending pattern
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Chapter 3- slide 17
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The Company’s
Macroenvironment
Economic Environment
Changes in Consumer Spending Patterns

• Ernst Engel—Engel’s Law


• As income rises:
– The percentage spent on food declines
– The percentage spent on housing remains
constant
– The percentage spent on savings
increases
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Chapter 3- slide 18
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The Company’s Macroenvironment
Natural Environment

Natural environment involves the natural


resources that are needed as inputs by marketers
or that are affected by marketing activities
• Trends
– Shortages of raw materials
– Increased pollution
– Increase government intervention
– Environmentally sustainable strategies (green
marketing)

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Chapter 3- slide 19
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The Company’s
Macroenvironment
Technological Environment

• Most dramatic force in changing the


marketplace
• Creates new products and opportunities
• Safety of new product always a concern
• Radio frequency identification
transmitters (RFID) tracks your product
anywhere in the world
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Chapter 3- slide 20
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The Company’s
Macroenvironment
Political Environment

Political environment consists of laws,


government agencies, and pressure
groups that influence or limit various
organizations and individuals in a given
society

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Chapter 3- slide 21
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The Company’s Macroenvironment
Political Environment

• Legislation regulating business


– Increased legislation
– Changing government agency enforcement
(Food & Drug Authority, PEMRA, PCB)
• New forms of Nontariff barriers in Trade
(pressure of civil society for reduction in
foreign businesses)
• Increased emphasis on ethics
– Socially responsible behavior
– Cause-related marketing
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Chapter 3- slide 22
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The Company’s
Macroenvironment
Cultural Environment

Cultural environment consists of


institutions and other forces that affect a
society’s basic values, perceptions, and
behaviors

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Chapter 3- slide 23
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The Company’s
Macroenvironment Cultural Environment
Persistence of Cultural Values

Core beliefs and values are persistent and


are passed on from parents to children and
are reinforced by schools, churches,
businesses, and government
Secondary beliefs and values are more
open to change and include people’s views
of themselves, others, organizations,
society, nature, and the universe
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Chapter 3- slide 24
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The Company’s Macroenvironment Cultural Environment
Shifts in Secondary Cultural Values

• After 9/11 more shift towards religious


values
• Islamic banking is growing well
• People’s view of themselves
– Yankelovich Monitor’s consumer segments:
• Do-It-Yourselfers—recent movers
• Adventurers
• People’s view of others
– More “cocooning” (Getting out less with other
people)
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Chapter 3- slide 25
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The Company’s
Macroenvironment
Cultural Environment
Shifts in Secondary Cultural Values

• People’s view of organizations


• People’s view of society
– Patriots defend it
– Reformers want to change it
– Malcontents want to leave it

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Chapter 3- slide 26
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The Company’s
Macroenvironment
Cultural Environment
Shifts in Secondary Cultural Values

• People’s view of nature


– Some feel ruled by it
– Some feel in harmony with it
– Some seek to master it
• People’s view of the universe
– Renewed interest in spirituality

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Chapter 3- slide 27
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Responding to the Marketing
Environment
Views on Responding

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Chapter 3- slide 28
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All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.

Copyright © 2010 Pearson Education, Inc.


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Copyright © 2010 Pearson Education, Inc.


Chapter 3- slide 29
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